Fiduciary Guarantee Registration

Fiduciary guarantee registration has been regulated in Article 11 to Article 18 of Law Number 42 of 1999 concerning Fiduciary Guarantees and Government Regulation Number 86 of 2000 concerning Procedures for Registration of Fiduciary Guarantees and Costs for Making Fiduciary Guarantee Deeds. The government regulation consists of 14 articles. The matters regulated in this Government Regulation include: fiduciary registration, procedures for correcting certificates, changing certificates, deletions, and replacing certificates.

In Article 11 of Law Number 42 of 1999 concerning Fiduciary Guarantees, it is determined that objects, both those located in the territory of the Republic of Indonesia and those located outside the territory of the Republic of Indonesia that are burdened with fiduciary guarantees, must be registered. Registration is carried out at the Fiduciary Registration office. Fiduciary registration offices have been established in every province in Indonesia. The fiduciary registration office is within the scope of the duties of the Department of Justice and Human Rights.

Fiduciary Guarantee Execution

Execution is the confiscation and sale of objects that are the object of the Fiduciary Guarantee. Execution arises because the debtor defaults or does not fulfill his obligations to the creditor on time. Fiduciary Guarantee Execution is regulated in Article 29 to Article 34 of Law Number 42 of 1999 concerning Fiduciary Guarantees. In Article 29, if the debtor or fiduciary giver defaults, there are three ways to execute the object that is the object of the Fiduciary Guarantee, namely:

  1. Implementation of executorial title by the Fiduciary Recipient
  2. The sale of objects that are the object of Fiduciary Guarantee under the authority of the Fiduciary Recipient through public auction and taking repayment of receivables from the proceeds of the sale, and
  3. Sale by private treaty based on an agreement between the Grantor and the Fiduciary Recipient if in this way the highest price can be obtained which benefits the parties.

In the implementation of the Fiduciary Guarantee execution, the Fiduciary Grantor is obliged to hand over the object that is the object of the Fiduciary Guarantee. Conversely, if the Fiduciary Grantor does not hand over the object that is the object of the fiduciary guarantee when the execution is carried out, the Fiduciary Recipient has the right to take the object that is the object of the Fiduciary Guarantee and if necessary can ask for assistance from the authorities.

Constitutional Court Decision Number 18/PUU-XVII/2019

Important points in the Constitutional Court Decision No. 18/PUU-XVII/2019 include:

  1. Declaring Article 15 Paragraph (2) of Law Number 42 of 1999 concerning Fiduciary Guarantees along the phrase "executorial power" and the phrase "equal to a court decision that has permanent legal force" as contrary to the 1945 Constitution of the Republic of Indonesia and has no binding legal force as long as it is not interpreted as "for fiduciary guarantees where there is no agreement on default (default) and the debtor, then all legal mechanisms and procedures in the execution of the Fiduciary Guarantee Certificate must be carried out and apply the same as the execution of a court decision that has permanent legal force";
  2. Declaring Article 15 Paragraph (3) of Law Number 42 of 1999 concerning Fiduciary Guarantees along the phrase "default" as contrary to the 1945 Constitution of the Republic of Indonesia and has no binding legal force as long as it is not interpreted that "the existence of a default is not determined unilaterally by the creditor but based on an agreement between the creditor and the debtor or based on legal efforts that determine that a default has occurred";
  3. Stating that the Explanation of Article 15 Paragraph (2) of Law Number 42 of 1999 concerning Fiduciary Guarantees along the phrase "executorial power" is contrary to the 1945 Constitution of the Republic of Indonesia and has no binding legal force as long as it is not interpreted as "for fiduciary guarantees where there is no agreement on default and the debtor objects to voluntarily handing over the object that is the object of the fiduciary guarantee, then all legal mechanisms and procedures in the execution of the Fiduciary Guarantee Certificate must be carried out and apply the same as the execution of a court decision that has permanent legal force."

It can be concluded from the Constitutional Court Decision Number 18/PUU-XVII/2019 that the phrases "executorial power" and "equal to a court decision that has permanent legal force" in Article 15 Paragraph (2) of Law Number 42 of 1999 concerning Fiduciary Guarantees, as well as the phrase "default" in Article 15 Paragraph (3) of Law Number 42 of 1999 concerning Fiduciary Guarantees, have no binding legal force and must be interpreted in the context of a default agreement and the debtor's willingness to voluntarily hand over the object of the fiduciary guarantee.

Implementation of Execution of Fiduciary Guarantee Objects After the Constitutional Court Decision No. 18/PUU-XVII/2019

After the Constitutional Court Decision Number 18/PUU-XVII/2019, there are several legal mechanisms and procedures that must be considered in the execution of fiduciary guarantee certificates. Article 29 of the Fiduciary Law also stipulates that if the debtor defaults, execution of the Fiduciary Guarantee object can be carried out in several ways, such as the implementation of the executorial title as referred to in Article 15 paragraph (2) by the Fiduciary Recipient. In addition, Article 15 paragraph (2) of Law Number 42 of 1999 concerning Fiduciary Guarantees states that the Fiduciary Guarantee Certificate has executorial power equal to a court decision that has obtained permanent legal force.

However, after the Constitutional Court's decision, Article 15 paragraph (2) of the Fiduciary Law along the phrase executorial power and the phrase equal to a court decision that has permanent legal force is contrary to the 1945 Constitution and has no binding legal force as long as it is not interpreted as for fiduciary guarantees where there is no agreement on default (default) and the debtor objects to voluntarily handing over the object that is the object of the fiduciary guarantee. Thus, the implementation of fiduciary guarantee execution after the Constitutional Court Decision Number 18/PUU-XVII/2019 requires the parties involved to pay attention to the applicable legal mechanisms and procedures, and ensure that the execution is carried out in accordance with the provisions in the Fiduciary Law.

Obstacles Occurring in the Implementation of Execution of Fiduciary Guarantee Objects After the Constitutional Court Decision No. 18/PUU-XVII/2019

Obstacles that occur in the implementation of Execution of Fiduciary Guarantee Objects After the Constitutional Court Decision No. 18/PUU-XVII/2019, include: 1) Obstacles in the Execution Process, where obstacles are faced in the implementation of parate execution of fiduciary guarantees after the Constitutional Court Decision Number 18/PUU-XVII/2019, for example problems in the fiduciary guarantee execution process that can violate the rights of the fiduciary grantor (debtor); and 2) Limitations in the Auction Process, where obstacles to the implementation of auctions of fiduciary guarantee objects at this time, such as problems in the auction process that can disrupt legal certainty for the parties involved.

Solutions in Overcoming Obstacles Occurring in the Implementation of Execution of Fiduciary Guarantee Objects After the Constitutional Court Decision No. 18/PUU-XVII/2019

Solutions in overcoming obstacles that occur in the implementation of execution of fiduciary guarantee objects after the Constitutional Court Decision No. 18/PUU-XVII/2019, include:

  1. Strict legal supervision must be carried out to ensure that the execution of fiduciary guarantee objects is in accordance with the law and does not violate the rights of the fiduciary grantor. This supervision can be carried out through the courts and authorized financing institutions;
  2. Appropriate education and training is provided to financing institutions and authorized parties to ensure that they understand and follow the correct procedures in the execution of fiduciary guarantee objects;
  3. Increased coordination and socialization is needed to increase coordination between the government, related institutions (such as the Ministry of Law and Human Rights, the Police, and the Prosecutor's Office), and business actors to align perceptions and implementation; and
  4. Formation of implementing regulations, the government can issue implementing regulations, such as Government Regulations or Ministerial Regulations, to further regulate the procedures and procedures for executing fiduciary guarantee objects in accordance with the Constitutional Court's decision. These regulations can provide legal certainty and clear guidelines for the parties.

It can be concluded that, broadly speaking, these solutions include strict supervision, capacity building through education and training, good coordination and socialization, and the establishment of more detailed regulations or implementing regulations as guidelines for the parties. This is important to ensure that the execution of fiduciary collateral objects runs according to law, protects the rights of the parties, and provides legal certainty after the Constitutional Court's decision.

References

  • Law Number 42 of 1999 concerning Fiduciary Guarantees.
  • Constitutional Court Decision Number 18/PUU-XVII/2019.
  • Related laws and regulations, such as Government Regulation Number 86 of 2000 concerning Procedures for Registration of Fiduciary Guarantees.
  • Journal "Implications of the Constitutional Court Decision Number 18/PUU-XVII/2019 on the Execution of Fiduciary Guarantees" by Adi Sulistiyono and Maradaman Simanungkalit (2020), Journal of Law and Justice.